Dealing with African disputes

The afternoon of the African Law & Business Summit 2018 focused on how Africa’s econo...

The afternoon of the African Law & Business Summit 2018 focused on how Africa’s economic growth is reflected by developments in arbitration and the battle against corruption.

The message from the afternoon session of the African Law & Business Summit 2018, held in London on 8 November, was that building strong dispute resolution practices and anti-corruption systems are important to protecting investment in Africa.

The tone for an afternoon heavily focused on dispute resolution was set by Segun Osuntokun, head of the Africa group at Bryan Cave Leighton Paisner (BCLP) as well as managing partner of the firm’s London office and head of the energy disputes practice.

He drew the connection between rising international investment and the need for good arbitration processes to make it possible by protecting that investment.

That has created plenty of opportunities for international arbitration lawyers working for clients with African interests and fuelled the continued growth of the profession.

In turn, that has led to the spread of international arbitral institutions, led by those in Egypt, Morocco, Kenya, Nigeria and Rwanda. Until recently the LCIA-MIAC in Mauritius would have been on that list, offering a stable political climate and a good judiciary, said Osuntokun.

However, the departure of the London Court of International Arbitration (LCIA) from that joint venture has been a setback, taking cases with it back to London, and as yet it is unclear whether the newly independent Mauritius International Arbitration Centre (MIAC)or theMCCI Arbitration and Mediation Centre (MARC) will emerge as the new front-runner.

MARC is one of a number of African countries and arbitral institutions, including OHADA’sCommon Court of Justice and Arbitration (CCJA) which have overhauled their rules recently, hoping to capitalise on greater demand for arbitration and to keep pace with institutions in other parts of the world.

It has been widely noted, however, that arbitrator appointments have not followed suit, with the profession still dominated by arbitrators from outside Africa. Osuntokun said that this situation has slightly improved, with a small uptick in African appointments, albeit from a low base.

ARBITRATING BUSINESS DISPUTES

Osuntokun’s speech “painted a picture of optimism, with one or two clouds”, said Harry Matovu QC of Brick Court Chambers, chairing the panel which followed, investigating some of those themes in more detail.

As the first speaker, Jean-François Le Gal of Pinsent Masons, explained, Africa has the second-fastest growing economy in the world, with 4% in 2018 so far and with a rise in the number of arbitrations involving African countries and parties, “there is a clear appetite for growth” in arbitration.

That growth is built on the ability to enforce arbitration in most countries of the world, thanks to the New York Convention, and Arish Bharucha of Cooke, Young & Keidan gave the summit a rundown of its importance and the pitfalls of enforcing in various jurisdictions.

The theme of enforcement was picked up by Momoh Kadiri of Mitchell Simmonds Solicitors, who looked at the issues surrounding enforcement against states and noted that the value of an arbitral award can only be measured by the asset you can enforce it against, rather that its overall monetary value. While the New York Convention provides the framework for enforcement, Kadiri said it was worth looking at the local arbitration laws to get a clearer idea of each country’s approach to enforcement.

While some African nations have mixed reactions to arbitration, Emeka Akabogu of Akabogu & Associates explained that Nigeria is arbitration friendly, with support from the courts. The arbitral industry is mostly focused on Lagos, but there is a lot of industry elsewhere in the country and institutions may spread out over time. Given the size of Nigeria and its population, this pro-arbitration stance should have a big impact on the continent, he said.

However, enforcement efforts are less straightforward, with the government having a track record of rejecting attempts to enforce against it, which sparked some debate among the panel about Nigeria’s commitment to arbitration.

WHITE-COLLAR CRIME

Having looked at the civil side of dispute resolution, the next panel considered the criminal in the form of corruption, which had been a recurrent theme throughout the day, as panellists and delegates had repeatedly referred to it as a major concern when doing business in Africa.

Chaired by Korieh Duodu of Egality Law, it began with an explanation of some compliance issues by Paige Berges of CDC Group. Compliance is too often “viewed as a dirty word or tick box exercise”, argued Berges, continuing that if a company simply views it in that way, it is not really being compliant.

However, it is not as simple as following a clear formula to compliance – “there is no one-size fits all approach” to risk assessment and installing systems, she explained, and there are different levels of compliance checks, depending on the scale and seriousness of the project.

The challenges of handling corruption cases were outlined by Richard Lord QC of Brick Court Chambers, who called on his own experience, saying that allegations often follow changes of regime, as wrongdoing by the previous government comes to light, or there is a settling of scores by the new government.

Lord continued that detail is critical when bringing a claim: “You have got to be really forensic in your cause of action.” One of the main obstacles these cases face is getting past the layers of secrecy in the countries where the stolen assets have resurfaced.

Duodu chimed in to note the difference between corruption as a cause of action and as a defence to another claim, and providing a link with the previous panel, as Kwadwo Sarkodie of Mayer Brown considered the impact that corruption, or allegations of corruption as a defence, can have on arbitral claims made under investment treaties.

“Corruption is a serious and pernicious cause of harm,” he said, adding that the profession has a “duty to fight and combat corruption wherever it arises”.

The impact of corruption was illustrated by the World Duty Free v Kenya case at the International Centre for Settlement of Investment Disputes (ICSID), a landmark case which uncovered corruption and Sarkodie noted that it was vital that tribunals and the arbitral community as a whole did not turn a blind eye to corruption.

He also expressed concern about the stance taken by South Africa and Tanzania, acknowledging that it reflected popular opinion in those countries.

One country where the battle against corruption has made progress is Angola, as Pedro Guimarães of FCB Sociedade de Advogados explained. He said that since the election of João Lourenço as president in 2017, although corruption still exists, a change in culture had been taking place. Lourenço has been pressing for an anti-corruption criminal law, which has not yet come into existence, but Guimarães was optimistic about Angola’s future, following this top-down approach to change, which has already seen the arrest of the son of former president Jose Eduardo dos Santos in relation to fraud charges.

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